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POLITICO 44

Two former high-level managers at IBM and Microsoft are playing key roles in the Obama administration’s patent reform efforts, leading critics to question whether their involvement constitutes a breach of the administration’s ethics policy.

Opponents of the Obama administration’s position on patent reform say that David Kappos and Marc Berejka, who recently took top jobs in the Commerce Department, are wielding too much influence over a policy that stands to benefit both of their former companies.

As recently as March, Kappos, who was vice president and assistant general counsel for intellectual property at IBM, appeared before a Senate panel to express the company’s support for patent reform legislation making its way through Congress. And for more than a decade, Berejka worked in senior government affairs roles at Microsoft, including eight years as a lobbyist for the high-tech giant.

Now they are once again influencing the debate but from within the Commerce Department, where Kappos has been in charge of the patent and trademark office since August and Berejka serves as a top policy adviser.

As one of the Obama administration’s chief negotiators on the bill and the main adviser to Commerce Secretary Gary Locke on patent issues, Kappos is a central figure in formulating the administration’s policy. Berejka has helped coordinate the department’s efforts to reach out to stakeholders involved in the debate and has been involved with the department’s patent reform messaging efforts.

Both officials were among the high-level aides who had a hand in drafting an Oct. 5 letter signed by Locke that announced the administration’s provisional support for the Senate’s patent reform bill — the same piece of legislation that Kappos promoted seven months earlier as an employee of IBM.

The letter, addressed to Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.), who sponsored the patent bill, and the committee’s ranking member, Sen. Jeff Sessions (R-Ala.), was greeted with public statements of support from both Microsoft and IBM.

At Kappos’s July confirmation hearing for the Commerce post, Sen. Arlen Specter (D-Pa.) grilled him on his ties to IBM. He pledged to steer clear of any issues that involved the company.

“To me, it’s extraordinarily important that I have absolutely nothing to do with any particular decision that involves my former employer if I am confirmed for this job,” Kappos said at the time.

He added: “Like other people who are in private industry and move to the government, I will put my previous role behind me and focus entirely on doing the right thing for the United States of America.”

Berejka’s job at the Commerce Department did not require Senate confirmation.

The involvement of Kappos and Berejka in the patent reform process provides an example of how former lobbyists and appointees with corporate ties can exert power even in an administration that swept into Washington with promises of curbing their influence.

On his first full day in office, President Barack Obama issued an executive order banning appointees of his administration from working on any matter “involving specific parties that is directly and substantially related” to their former employers for a period of two years. Former lobbyists entering government are subject to even stricter ethics rules. Still, a number of appointees who did not meet the guidelines managed to find their way into the executive branch; some were issued waivers allowing them to serve in key roles.

Yet neither Kappos, who was not a registered lobbyist, nor Berejka, who records show was last registered to lobby in 2007, sought or received waivers. According to the Commerce Department, that was because no issues have come up that would have required a waiver. Locke, who previously acted as a lawyer for Microsoft himself, also did not seek or receive a waiver.

“Everybody’s experience comes from somewhere, and good people serve the nation in government from all walks of life. President Obama set an unprecedented standard for ethical conduct, and Secretary Locke has emphasized that standard for everyone at the Commerce Department,” said Nick Kimball, a Commerce spokesman. “The administration is assisting Congress as it seeks to pass patent reform legislation that will encourage innovation and help the economic recovery for all Americans.”

Readers' Comments (17)

Obama and his policies are nothing else but farce. His personnel office is a circus show. Only the Obama brainless sheeple can believe in everything he says. In reality, whatever Obama undertakes fails.

(1) God forbid that our government actually make policy while taking the concerns of business into account! Are these people CRAZY?? The ONLY interest groups worth listening to are liberal academics and labor leaders! (2) I bet there wouldn't be this outrage if Google was involved...in fact, I bet it's Google who is behind this effort to discredit these public servants since they worked for the competition. "Do no evil" my rear!

(1) God forbid our government take the concerns of the business community into their policy making considerations! Are these people CRAZY? I mean, the ONLY interest groups worth listening to are liberal academics and labor leaders! (2) I bet there wouldn't be this outrage if the public servants were former Google employees. Amazing what a free pass Google is getting to influence policy around IT issues in DC in the government right now without being seen as a special interest. "Do no evil" my rear!

(1) God forbid our government take the concerns of the business community into their policy making considerations! Are these people CRAZY? I mean, the ONLY interest groups worth listening to are liberal academics and labor leaders! (2) I bet there wouldn't be this outrage if the public servants were former Google employees. Amazing what a free pass Google is getting to influence policy around IT issues in DC in the government right now without being seen as a special interest. "Do no evil" my rear!

This new government of socialists/dictators in training and communists is despicable. Three years everyone...that's all until they are all booted out of Washington and sent packing. God and its intelligent and patriotic citizens help us until then.

For everyone who thought President Obama would really bring change, think again. What this story continues to tell us is that the Obama Administration (and for that matter the Democratic and Republican parties) is all about providing long term support for entrenched corporate, labor and governmental institutions. The reason our Constitution specifically discusses patents is to promote innovation by the little guy. The Founders were aware, like small business owners everywhere know, that to keep intellectually property locked up in the big corporations stifles innovation. This is one of the most glaring examples of corporate lobbyists buying our Federal Government. Think Local, Tax Local!

If The One had wanted an independent Director of the PTO (Patent and Trademark Office), he should have selected someone like Todd Dickinson or many other qualified candidates, not someone who will "transparently" favor high-tech over biotech and basement inventors.

“The administration is assisting Congress as it seeks to pass patent reform legislation that will encourage innovation and help the economic recovery for all Americans.”

But this bill will not encourage innovation: it will kill it. Few small entities can enforce their patents as it is. This bill will only make it harder to obtain and enforce them and harder for small entities to obtain funding. Ask the VC community. They are on record in stating that. It will make the US patent system a sport of kings which is what exactly what they are trying to do. Small entities create 70% of US jobs according to Senator Hatch. If we kill small entities, we will kill any chance of our economic and job recovery.

Patent reform is a fraud on America... Please see http://truereform.piausa.org/ for a different/opposing view on patent reform.

“The administration is assisting Congress as it seeks to pass patent reform legislation that will encourage innovation and help the economic recovery for all Americans.”

But this bill will not encourage innovation: it will kill it. Few small entities can enforce their patents as it is. This bill will only make it harder to obtain and enforce them and harder for small entities to obtain funding. Ask the VC community. They are on record in stating that. It will make the US patent system a sport of kings which is what exactly what they are trying to do. Small entities create 70% of US jobs according to Senator Hatch. If we kill small entities, we will kill any chance of our economic and job recovery.

Patent reform is a fraud on America... Please see http://truereform.piausa.org/ for a different/opposing view on patent reform.

As someone who was deeply involved in patent quality and patent reform as Congressional staff in 1998-2000, I am concerned that the reform debate will turn away from substantive issues and reform will be further delayed. Todd Dickenson did a good job running PTO, but he's been at GE and a D.C. law firm, would he be subject to the same criticism now? If you read the blogs and and news at the time, the nomination of David Kappos was widely regarded as a good thing for the PTO and for inventors. Kappos and Berejka have what is needed, a good understanding of a very arcane and complex area of law. No individual without such an understanding could take these positions and be useful advisors to the President. And this appeared to be the view of inventors of all stripes prior to Kappos' appointment. As was said in response to Mr. Kappos' Senate Confirmation: "AIPLA knows as well as anyone how well-suited Dave Kappos is to take on these challenges. Our experience with him as a long-time AIPLA member and leader gives us confidence that he will rise to meet them. We look forward to working with him and wish him all the best as he takes them up" remarked AIPLA Executive Director Q. Todd Dickinson. The concerns highlighted in this article must be kept in perspective.

Kappos may have left IBM, but he's still working for them. This bill will not do what they claim it will. What it will do is help large corporations maintain their monopolies and kill their small entity and startup competitors (which is exactly what they intended it to do) and with them the jobs they would have created. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” This bill is a wholesale slaughter of US jobs.

“Patent reform”

Just because they call it “reform” doesn’t mean it is. Patent reform is a fraud on America.

"Todd Dickenson did a good job running PTO, but he's been at GE and a D.C. law firm, would he be subject to the same criticism now?"

You bet he would be subject to the same criticism, he and Kappos are comrades in arms, working in lockstep to promote Patent Deform.

It does not matter if it is an IBM stooge or a GE stooge, they all are trying to make our patent system the exclusive domain of large transnational companies.

We are at a national crossroad at this time. One path will allow virtually any inventor-entrepreneur to rise above their station in life and challenge even the biggest companies. This is the path where America continues to be the land of opportunity.

The other path is to become like Europe, where invention is for the most part the domain of only the largest companies and advances are in the form of minor incremental inventions.

Patent Deform was written by and for big companies whose business model is based on systematic theft of independent inventors and their small company inventions. When they talk about innovation it means that they stole others inventions and pounded their chests claiming to be innovators. The only place they are creative is with public relations (read propaganda).

When they talk about bad patents, translate this to mean good patents with great value.

And when they talk about Patent Trolls, translate to mean that they were caught red handed with their sticky fingers in another's patent cookie jar, and the owner had the gall to hold them accountable.

The only thing Patent Deform will accomplish is to allow these companies to take American ingenuity and its wealth to the same places they have taken our jobs, our collective manufacturing knowhow, our national intellectual capital and most important the opportunity out of the land of opportunity.

Inventors are a scrappy lot, as evidenced by our ability to make these huge companies whine like five year old children. I intend on personally doing my best to see every Senator who voted for this bill held accountable for being the best which transnational money could dupe or buy.

Sen. Debby Debbie Stabenow deserves special mention, because one of the reasons she was elected to the Senate was that then Sen. Abraham's campaign manager told me that he had to raise ten million dollars to get reelected and that "no one ever lost an election over patents".

The only way that Michigan or any other state can sustain their standard of living in the face of low wage global competition is with patent protected American ingenuity. No protection translates into no prosperity, not just for inventors, but for every American.

Michigan inventors set aside our political affiliations and virtually all, including staunch Republications and Libertarians actively campaigned to send Abraham packing. There is more than a bit of irony that history should repeat itself.